Tuesday, February 5, 2019

2018 Farm Bill and Franklin County

by Levi A. Russell
 

On December 11, Congress released the 807-page Agriculture Improvement Act of 2018 from its conference committee, which passed with veto-proof majorities in both houses. The Act is the latest of a long line of legislation going back to the Great Depression commonly called the Farm Bill. This Farm Bill will define the U.S. Department of Agriculture’s activities from now until 2023 when it will expire and a new law will replace it. It replaces a law passed in 2014 that made major changes to agricultural policy. How does the 2018 Farm Bill affect Franklin county?


To answer this, we first need to ask: What does agriculture in Franklin county look like? For those of you who drive around our gravel roads regularly, it won’t surprise you that roughly one third of the land area of Franklin county is planted to corn and soybeans. These are the two major crops in this county and in much of eastern Kansas. Last year, over $54 million of corn and soybeans were planted in the county. While corn and soybeans are the primary crops in the county, farmers here also plant wheat and sorghum. Animal agriculture is also important in Franklin county. There are 44,500 cattle in the county, which means there are 1.7 cows, bulls, heifers, and steers for every person!


The 2018 Farm Bill and others like it in the past provide funding for three general program areas: agriculture, conservation, and nutrition assistance. Agricultural funding is primarily used to provide subsidies for crop insurance and income assistance to farmers when prices or yields are low, commonly referred to as the commodity title. Crop insurance for the primary crops in Franklin County hasn’t changed much in over a decade, but the 2014 Farm Bill made significant changes to the commodity title. These changes included a major shift in the program away from direct payments to farmers which occurred regardless of production conditions or prices to a risk-based commodity assistance program. Farmers were given the choice between two programs, one that focused on prices and the other that focused on total revenue for the crop. When prices or revenue fell below a certain level, payments were triggered.


The 2018 Farm Bill continues these commodity assistance programs with some notable exceptions. With the 2014 Farm Bill, farmers had to choose between the price program and the revenue program once and for all when they signed up in 2014. The new Bill allows farmers to choose again in 2019 for 2019 and 2020 and then choose annually between the two from 2021 to 2023. This change gives farmers more choice in the program and will allow them to choose the program that they believe will best mitigate the risks they will face that year. Farmers will also be able to update their yields on which the program payments are calculated. Both of these changes will likely result in more flexible support for agriculture in Franklin County over the next 5 years.


Another program within the commodity title is the commodity loan program. This is a very old component of the Farm Bill designed to provide additional assistance when prices are very, very low. The 2018 Farm Bill includes the first update to this program in 16 years, increasing loan rates (the base level of price support) by 12.8% for corn and 24% for soybeans.


There are two major changes to environmentally-focused programs in the 2018 Farm Bill. First, crop insurance has been changed to accommodate the use of cover crops. Cover crops are beneficial to soil health and help reduce erosion after the primary crops are harvested. Legislators hope that changing crop insurance to accommodate the use of cover crops will increase farmers’ adoption of this environmentally-beneficial practice.


The Conservation Reserve Program (CRP) is another long-standing component of the Farm Bill. This program allows farmers to take land out of crop production and receive “rental” payments from the government. These rental payments designed to incentivize the maintenance of habitat for wildlife. CRP contracts typically last 10 years.  The 2014 Farm Bill allowed up to 24 million acres to be put into CRP, but the 2018 Bill increases this to 27 million by 2023. I couldn’t find detailed data for Franklin County, but, currently, there are somewhere between 10,000 and 25,000 acres in CRP in the county.


Nutrition assistance is always a contentious subject in Farm Bill debates among legislators. This component of the Bill typically represents about 75% of the total funding in the Bill and goes to support the Supplemental Nutrition Assistance Program (SNAP), formerly called food stamps. Though several controversial changes were proposed — for example, expanding and enhancing work requirements for participation in the program — none of them made it into the final bill. Funding for SNAP is expected to increase $98 million total over the 5 year life of this Bill.


Overall, the 2018 Farm Bill did not make dramatic changes to agricultural policy for 2019-2023. However, the changes that were made will likely improve the safety net for farmers, incentivize better environmental stewardship, and increase funding for one of the more efficient government food assistance programs.

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